State System offers raises to faculty, seeks agreement on changes to health care plan



Nov. 6, 2015

HARRISBURG, Pa. - Pennsylvania's State System of Higher Education has offered the Association of Pennsylvania State College and University Faculties a one-year contract that would provide faculty with a salary increase of 2.5 percent or 5 percent or a one-time cash payment equivalent to 2.5 percent of their salary, based on their placement on the salary schedule.

The counter proposal presented at the bargaining table today also asks APSCUF to agree to changes to the health care plan that covers its members that would be identical to those announced earlier this week for State System managers and administrators, university health center nurses and campus police officers and security guards. APSCUF, which represents faculty at the 14 State System universities, earlier had proposed a one-year agreement that included the raises, but no provisions for health care cost savings.

The health care plan changes, which would take effect in January, would reduce the overall cost of the plan for the System to help keep the universities affordable to students and their families, while providing current employees access to the same health care services they have now.

The proposal calls for faculty--like all other State System employees covered by the health care plan--to contribute from about $3 to $14 more every two-week pay period toward the cost of their health insurance premium, depending on their level of coverage. Other plan adjustments, including new deductible and co-insurance requirements for some medical services and higher prescription drug co-payments, would affect employees based on how much they use the plan.

The changes would more closely align the System's health care plan with those offered by other colleges and universities in Pennsylvania and across the nation.

"We are committed to keeping tuition as low as possible, which has become increasingly challenging as many of our costs, including those for employee health care and pensions, have continued to rise well in excess of the normal rate of inflation," said Chancellor Frank Brogan.

"These changes will help us to control a portion of those costs, which, in turn, will help ensure our students have continued access to high-quality, high-value educational opportunities," Brogan said. "At the same time, our employees will continue to have access to a comprehensive package of health care coverage for themselves and their families, at only modestly higher rates."

The proposal presented today to the nearly 5,500-member faculty union echoes agreements between the State System and the Office of Professional Employees International Healthcare Pennsylvania, which represents about 85 university health center nurses; and the Security, Police and Fire Professionals of America, which represents approximately 225 campus police and security officers. Members of both of those unions also will receive raises as part of their agreements.

The System would save $9 million a year if APSCUF agrees to the health care plan revisions. The changes already announced for the other approximately 1,800 System employees, including those not represented by any of the State System's seven labor unions, will save the System about $3.5 million annually. The combined savings will essentially offset the cost of the wage and salary increases employees will receive, helping to alleviate the financial stress under which the universities are operating.

"We must continue to look for ways not only to ensure our universities remain affordable to students and their families, but also that the institutions themselves remain viable into the future," Brogan said. "The revisions to the health care plan, and the savings they will produce, will help address both of those issues, but much more still needs to be done."

State support to the State System has declined steadily over the last decade, requiring the universities to make a variety of spending cuts to balance their budgets and hold down costs. Over the last 10 years the universities have trimmed an estimated $300 million from their combined operating budgets, doing so by implementing various strategies, including collaborative purchasing, investing in more cost-efficient energy systems, automating some processes and services, reducing staffing levels, deferring some maintenance work and sharing a broad ranges of administrative services.

Even with those efforts, however, some costs, including employee health care and pensions, have continued to rise. Several other revisions have been made to the employee health care plan in recent years to help slow those annual cost increases.

The State System has been studying additional possible changes to the plan over the past year, working with its health care provider on revisions that will both lower the cost of coverage and continue to provide a level of benefits to employees that will be extremely competitive in the higher education market, all without having any effect on the student learning experience or reducing other important services. In addition to producing cost savings for the System, the changes were designed so as to minimize the financial impact on employees.

If APSCUF agrees to these most recent revisions, all employees covered by the System-administered health care plan would share the same benefits package and the same cost structure.

The savings the changes would produce would be added to the approximately $2.7 million in higher costs the System will avoid this year as the result of recent collective bargaining agreements reached between the Commonwealth and the American Federation of State, County, and Municipal Employees and the System and the State College and University Professional Association, whose members receive their health care coverage through the Pennsylvania Employee Benefits Trust Fund. Those two unions combined represent about 4,100 State System employees.

The State System and APSCUF have been negotiating toward a new contract for nearly a year. Faculty are continuing to work under the terms of the most recent collective bargaining agreement, which expired June 30, 2015.

All of the System's other labor unions already have agreed to new contracts, mostly one-year agreements that run through June 30, 2016. All include a combination of raises and/or cash payments and provisions that provide for health care-related cost savings.

MEDIA CONTACT: Kenn Marshall | 717.720.4045 |